Research on Supply Chain Inventory Optimization and Benefit Coordination with Controllable Lead Time


In this paper, we propose two supply chain inventory models with controllable lead time, the first is proposed under centralized decision mode and the other is proposed under decentralized decision mode. The solution procedures are also suggested to get the optimal solutions. In addition, taking individual rationality into consideration, Shapely value method and MCRS method are used to coordinate the benefits of the vendor and the buyer. Numerical example is given to illustrate the results of the proposed models.

Share and Cite:

Ye, F. , Li, Y. , Xu, X. and Zhao, J. (2008) Research on Supply Chain Inventory Optimization and Benefit Coordination with Controllable Lead Time. Journal of Service Science and Management, 1, 21-28. doi: 10.4236/jssm.2008.11003.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] R.J. Tersine, and E.A. Hummingbird, “Lead-time Re-duction: The Search for Competitive Advantage”, Inter-national Journal of Operations and Production Manage-ment, 1995,15(2), pp8-18.
[2] E. Naddor, Inventory Systems, Wiley, New York, 1966.
[3] E.A. Silver, and R. Peterson, Decision Systems for In-ventory management and Production Planning, Wiley, New York, 1985.
[4] R.J. Tersine, Principles of Inventory and materials management. North-Holland, New York, 1982.
[5] C.J. Liao, and C.H. Shyu, “An Analytical Determination of Lead Time with Normal Demand”, International Journal of Operations and Production Management, 1991, 11(9), pp72-78.
[6] M. Ben-Daya, and A. Raouf, “Inventory Models In-volving Lead Time as Decision Variable”, Journal of the Operational Research Society, 1994,45, pp579-582.
[7] L.Y. Ouyang, N.C. Yen, and K.S. Wu, “Mixture In-ventory Model with Backorders and Lost Sales for Vari-able Lead Time”, Journal of the Operational Research Society, 1996, 47, pp829-832.
[8] L.Y. Ouyang, and K.S. Wu, “A Minimax Distribution Free Procedure for Mixed Inventory Model with Variable Lead Time”, International Journal of Production Eco-nomics, 1998, 56, pp511-516.
[9] I. Moon, and S. Choi, “A Note on Lead Time and Dis-tributional Assumptions in Continuous Review Inventory Models”, Computers & Operations Research, 1998,25, pp1007-1012.
[10] L.Y. Ouyang, and B.R. Chuang, “Stochastic Inventory Model Involving Variable Lead Time with a Service Level”, Yugoslav Journal of Operations Research, 2000, 10(1), pp81-98.
[11] J.C. Pan, Y.C. Hsiao, and C.J. Lee, “Inventory Model with Fixed and Variable Lead Time Crash Costs Consid-erations”, Journal of the Operational Research Society, 2002, 53, pp1048-1053.
[12] S.K. Goyal, “A Joint Economic-lot-size Model for Purchaser and Vendor: A Comment”, Decision Science, 1998, 19, pp236-241.
[13] L.Y. Ouyang, K.S. Wu, and C.H. Ho, “Integrated Vendor-Buyer Cooperative Models with Stochastic De-mand in Controllable Lead Time”, International Journal of Production Economics, 2004, 92, pp255-266.
[14] A. Ravindran, D.T. Phillips, and J.J. Solberg, Operations Research: Principle and Practices, Wiley, New York, 1987.
[15] D. Perez-Castrillo, and D. Wettstein, “Bidding for the surplus: a non-cooperative approach to the Shapley value”, Journal of Economics Theory, 2001,100, pp274–294.
[16] J. Quigley, and L. Walls, “Trading reliability targets within a supply chain using Shapley's value”, Reliability Engineering & System safety, 2007, 92(10), pp1448-1457.

Copyright © 2024 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.